E.P.A. approves higher ethanol blend

WASHINGTON — The Environmental Protection Agency (E.P.A.) on Oct. 13 issued a decision allowing the use of fuel blends of up to 15% ethanol (E15) in vehicles with model years of 2007 and newer.

The decision was made after review of extensive testing by the Department of Energy (D.O.E.) and other available data on the impact of E15 on engine durability and emissions, said Gina McCarthy, E.P.A. assistant administrator for air and radiation. Prior to the E.P.A.’s decision, only a blend of up to 10% ethanol was allowed in gasoline.

Model year 2007 and newer vehicles represent one-third of the country’s gasoline consumption, Ms. McCarthy said. That percentage is expected to increase rapidly to more than 100 million cars and 50% of fuel consumption by 2015.

The E.P.A. will make a decision on vehicles model years 2001-06 after receiving the results of ongoing tests from the D.O.E. The testing is expected to be completed in November, Ms. McCarthy said.

No waiver will be granted this year for model year 2000 and older vehicles, any motorcycles, heavy-duty vehicles or non-road engines. The E.P.A. said there is no testing data to support a waiver.

The agency also made it clear that its decision is not a mandate, but simply a waiver allowing the use of E15 where and when it is available. It will be up to fuel suppliers and retailers to make the fuel available.

Ms. McCarthy said even though E15 is only a 5% increase from the current blending level, it amounts to a 50% increase in the amount of renewable fuels in a gallon of E15 as compared to E10.

Reaction to the announcement was mixed, with several groups opposing the move, including a coalition comprising the American Meat Institute, the Grocery Manufacturers Association, the National Council of Chain Restaurants, the National Chicken Council, the American Frozen Food Institute, the American Bakers Association, the National Meat Association and the National Turkey Federation.

“E.P.A.’s decision to increase the ethanol blend to E15 will further increase volatility in the grain markets,” said Robb MacKie, president and chief executive officer of the American Bakers Association. “Other grains, including wheat, may increasingly be in shorter supply; potentially this may impact food prices in the future as the nation continues to lose wheat acreage. A.B.A. strongly opposes this ill advised decision and calls on E.P.A. to consult with relevant government agencies to carefully study how this would impact market volatility, to review the science behind the decision and analyze the economic impact on the already weakened economy.”

Scott Faber, vice-president of federal affairs at the G.M.A., added, “We are disappointed in the administration’s decision to allow more ethanol in gasoline before truly sustainable advanced biofuels are commercially available.

Not only will this decision adversely affect millions of consumers who don’t drive brand new cars, but also countless Americans who are struggling to feed their families in a slowly recovering economy. Recent spikes in corn prices due to supply concerns will only be exacerbated by this decision.”

Meanwhile, other industry executives hailed the move as a positive first step, and urged the E.P.A. to move quickly onto approving the higher blend for older vehicles.

"The arguments being made right now against E15 are the same as those made about E10 back in the late 1980s, when I entered the ethanol industry," said Jeff Broin, c.e.o. of POET. “Seventy billion gallons later, we have proven those arguments false, just as research on E15 is proving critics wrong today. Greater market access will help give investors the needed confidence to commit to bringing cellulosic ethanol to commercial scale. Many projects, POET’s Project LIBERTY among them, are ready for commercialization but hindered by unnecessary limits on ethanol content in fuel.”

The National Corn Growers Association said E.P.A.’s decision casts a shadow on all ethanol blend levels. Blends up to E15 and beyond have been tested and found suitable for a wide range of newer and older vehicles. Last month, the automotive engineering firm Ricardo found that moving from 10% ethanol in gasoline to 15% will mean little, if any, change in the performance of older cars and light trucks, those manufactured between 1994 and 2000.

The Renewable Fuels Association (R.F.A.) said the E.P.A. missed a chance to create new economic opportunity by limiting E15 to 2007 and newer vehicles.

“EPA’s scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use today," said Bob Dinneen, president and c.e.o. of the R.F.A. “Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike. America’s ethanol producers are hitting an artificial blend wall today. The goals of Congress to reduce our addiction to oil captured in the Renewable Fuels Standard cannot be met with this decision."

Wholesale adoption of E15 is unlikely, according to gasoline marketers and retailers. In its weekly newsletter from Sept. 17, the Petroleum Marketers’ Association of America said, “Limiting the waiver to a specific class of vehicles based on date of manufacture means retailers would be forced by market conditions to carry both E-10 and E-15 product, thus increasing the risk of consumer misfueling. The good news is that the waiver will likely not require E-15 but only allow its use. Refiners are not expected to supply E-15 as a result of the waiver approval alone.”

In addition to the waiver, the E.P.A. is proposing E15 pump labeling requirements, including that the fuel industry specify the ethanol content of gasoline sold to retailers. There would also be a quarterly survey or retail stations to ensure the gas pumps are properly labeled.